The next step involves entering a passphrase. This prevents you from getting your funds stolen if someone gets access to your device and its PIN or to your 24-word backup. Before doing this step, please read below to know some important basics.
It acts as a password that you add on top of your wallet backup (24-word seed phrase).
You can create as many passphrase-protected wallets as you like, with each new passphrase generating a completely new wallet.
The default wallet does not have a passphrase, adding one gives you plausible deniability, meaning that you can unlock the device normally containing no to little funds, with the majority of your bitcoin in a passphrase-protected wallet.
If someone comes into contact with your 24-word seed or digital backup, they won’t be able to steal your funds since they also need the passphrase to unlock the funds.
Write down the passphrase you want to use before entering it in your computer.
The passphrase is required every time you want to spend the funds from your Coldcard.
Use a combination of words as a passphrase to have less trouble remembering it.
Use at least 12 characters in your passphrase, 24 characters offer more security.
If someone has access to your PIN and Coldcard, the passphrase will prevent them from taking your Bitcoin.
Create a unique passphrase that nobody can guess but that you can remember.
If you lose the passphrase, you lose access to your Bitcoin forever.
You cannot change your passphrase.
You can only create a new one, which in turn will generate a new wallet.
The passphrase is required to recover your access to your Bitcoin if your Coldcard is damaged, lost or stolen.